CNL-15-017, Decommissioning Funding Status Report

Decommissioning Funding Status Report

ML15098A176
Person / Time
Site:	Browns Ferry, Watts Bar, Sequoyah
Issue date:	03/31/2015
From:	James Shea Tennessee Valley Authority
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
CNL-15-017 L44 150331 001
Download: ML15098A176 (10)

Text

L44 150331 001 Tennessee Valley Authority, 1101 Market Street, Chattanooga , Tennessee 37402 CNL-15-017 March 31 , 2015 10 CFR 50.75(f)(1)

ATTN : Document Control Desk U.S. Nuclear Regulatory Commission Washington , D.C. 20555-0001 Browns Ferry Nuclear Plant, Units 1, 2, and 3 Renewed Facility Operating License Nos. DPR-33, DPR-52, and DPR-68 NRC Docket Nos. 50-259, 50-260 , and 50-296 Sequoyah Nuclear Plant, Units 1 and 2 Facility Operating License Nos. DPR-77 and DPR-79 NRC Docket Nos. 50-327 and 50-328 Watts Bar Nuclear Plant, Unit 1 Facility Operating License No. NPF-90 NRC Docket No. 50-390

Subject:

Decommissioning Funding Status Report

References:

1. Letter from TVA to NRC , "Decommissioning Funding Status Report," dated April 1, 2013 [ML13093A372]

In accordance with the requirements of 10 CFR 50.75(f)(1) , the Tennessee Valley Authority (TVA) is reporting on the status of decommissioning funding for Browns Ferry Nuclear Plant (BFN), Units 1, 2, and 3; Sequoyah Nuclear Plant (SQN), Units 1 and 2; and Watts Bar Nuclear Plant (WBN), Unit 1. The reporting requirements and corresponding TVA information follow.

1. The amount of decommissioning funds estimated to be required pursuant to 10 CFR 50. 75(b) and (c):

Decommissioning cost estimates were calculated using the formulas provided in NUREG-1307 , Revision 15, "Report on Waste Burial Charges ," utilizing the waste burial adjustment factors for Generic Low-Level Waste (LLW) Disposal Site and Combination of Compact-Affiliated and Non-Compact Facility. Bureau of Labor Statistics indices for the end of the 2012 calendar year were taken from the sources referenced by NUREG-1307 .

The calculated estimates for the end of calendar year (CY) 2014 are provided in Table 1.

U. S. Nuclear Regulatory Commission CNL-15-017 Page 2 March 31 , 2015 The dollar amounts shown in Table 1 have been rounded to the nearest hundred thousand dollars.

Table 1. Decommissioning Cost Estimates for end of CY 2014 Number Cost per Unit Total Plant Cost Plant of Units ($, in millions) ($,in millions)

BFN 3 673 .3 2,019.9 SQN 2 516.9 1,033.8 WBN 1 516.9 516.9

2. The amount accumulated in the TVA decommissioning fund at the end of the calendar year 2014 for the items included in 10 CFR 50. 75(b) and (c):

TVA's decommissioning fund balances at the end of CY 2014 are provided in Table 2. The dollar amounts shown in Table 2 have been rounded to the nearest dollar.

Table 2. Decommissioning Trust Fund Balances Decommissioning Fund Balance Plant, Unit

($)

BFN , Unit 1 246,553,343 BFN, Unit 2 235,734,175 BFN, Unit 3 212,258,675 SQN, Unit 1 339,973 ,980 SQN, Unit 2 323,489,887 WBN , Unit 1 158,127,261

3. A schedule of the annual amounts remaining to be collected for items in 10 CFR 50. 75(b) and (c) :

TVA has established a method to provide funding assurance on an ongoing basis. This method establishes a projection of necessary funds at the end of each calendar year based upon current decommissioning cost estimates and assumptions regarding escalation and rate of earnings. Each year, TVA reviews the performance of its decommissioning trust fund. If funds fall below an established threshold of 95 percent of projected trust fund balances, TVA will make contributions to the trust fund or provide other methods of funding assurance to ensure adequate fund ing .

U. S. Nuclear Regulatory Commission CNL-15-017 Page 3 March 31 , 2015 The table attached to TVA's April 1, 2013, letter (Reference 1) has been updated herein for the current calculated obligations, expressed in current dollars. This updated table is provided in Enclosure 1 to this letter. At the end of 2014, the trust unit balances shown in Table 2 were greater than the respective present values of the costs to decommission each unit. Therefore, no amounts are scheduled to be collected at this time.

4. The assumptions used regarding rates of escalation in decommissioning costs, rates of earnings on decommissioning funds, and rates of other factors used in funding projections:

• The assumed escalation in decommissioning costs is four percent.

• TVA assumed a projected annual real rate of return on decommissioning funds of five percent, as authorized by the TVA Board of Directors, TVA's rate-making authority.

5. Any contracts upon which the licensee is relying pursuant to 10 CFR 50. 75(e)(1)(v) :

None.

6. Any modifications occurring to a licensee 's current method of providing financial assurance since the last submitted report:

None.

7. Any material changes to trust agreements.

TVA's Fifth Amendment to the TVA Master Decommissioning Trust Agreement is included as Enclosure 2 to this letter.

If you have any questions concerning this matter, please contact Mr. Gordon Williams at 423-751-2687.

Respectfully, uY----

J se (/ W . Shea ce ~esident, Nuclear Licensing Enclosures cc: See Page 4

U. S. Nuclear Regulatory Commission CNL-15-017 Page 4 March 31, 2015

Enclosures:

1. Updated Projected Decommissioning Funding Levels for TVA Operating Units

2. Fifth Amendment to the Tennessee Valley Authority Master Decommissioning Trust Agreement cc:

NRC Regional Administrator- Region II NRC Senior Resident Inspector- Browns Ferry Nuclear Plant NRC Senior Resident Inspector- Sequoyah Nuclear Plant NRC Senior Resident Inspector- Watts Bar Nuclear Plant

ENCLOSURE 1 Updated Projected Decommissioning Funding Levels for TVA Operating Units

Updated Projected Decommissioning Funding Levels for TV A Operating Units*

Real BFN112-20-2033 BFN2 6-28-2034 BFN3 7-2-2036 SQN1 9-17-2020 SQN2 9-15-2021 WBN111-9-2035 Return Annua l Projected Annua l Projected Annual Projected Annual Projected Annual Projected Annual Projected 5.0% Annual Funding Fund Annual Funding Fund Annual Funding Fund Annual Funding Fund Annua l Funding Fund Annual Funding Fund Year Di sbursement Assurance Assets Disbursement Assurance Assets Disbursem ent Assurance Assets Disbursement Assurance Assets Disbursement Assurance Assets Disbursement Assurance Assets 20 14 $0.0 $221.7 $0 .0 $2 16. 1 $0.0 $ 195.9 $0.0 $324 .9 $0.0 $309.5 $0.0 $155.2 2015 $0.0 $232.8 $0.0 $226.9 $0 .0 $205.7 $0.0 $341.2 $0.0 $325.0 $0.0 $163.0 2016 $0.0 $244.4 $0.0 $238.2 $0 .0 $216.0 $0.0 $358.2 $0.0 $341.3 $0 .0 $171 .1 2017 $0.0 $256.6 $0.0 $250.1 $0 .0 $226.8 $0.0 $376.2 $0.0 $358.3 $0 .0 $179.7 20 18 $0.0 $269.5 $0.0 $262.7 $0.0 $238.1 $0.0 $395.0 $0.0 $376.3 $0.0 $188.7 2019 $0.0 $283 .0 $0.0 $275.8 $0.0 $250.0 $0 .0 $4 14.7 $0.0 $395.1 $0.0 $198.1 2020 $0.0 $297.1 $0.0 $289.6 $0.0 $262.5 $0 .0 $429.5 $0.0 $4 14 .8 $0.0 $208.0 2021 $0.0 $312.0 $0.0 $304.1 $0.0 $275.6 $0.0 $429 .5 $0.0 $218.4 2022 $0.0 $327.6 $0.0 $319.3 $0 .0 $289.4 $0.0 $229.3 '

2023 $0.0 $343.9 $0.0 $335.2 $0 .0 $303.9 $87.4 $0.0 $240.8 2024 $0.0 $361 .1 $0.0 $352.0 $0.0 $319.1 $516.9 $516.9 $87.4 $0.0 $252 .8 2025 $0.0 $379.2 $0.0 $369.6 $0 .0 $335.0 $516.9 $516 .9 $0.0 $265.5 2026 $0.0 $398.1 $0.0 $388.1 $0.0 $351.8 $0 .0 $278.7 2027 $0.0 $4 18 .1 $0.0 $407.5 $0.0 $369.4 $0.0 $292.7 2028 $0.0 $439.0 $0.0 $427.8 $0 .0 $387.9 $0.0 $307.3 2029 $0.0 $460 .9 $0 .0 $449.2 $0 .0 $407.2 $0.0 $322 .7 2030 $0.0 $483.9 $0.0 $471 .7 $0.0 $427.6 $0.0 $338.8 203 1 $0.0 $508. 1 $0 .0 $495.3 $0.0 $449.0 $0 .0 $355.7 2032 $0.0 $533.6 $0.0 $520 .0 $0 .0 $471.4 $0 .0 $373.5 2033 $0.0 $559.4 $0.0 $546.0 $0.0 $495.0 $0 .0 $392.2 2034 $0.0 $559.4 $0 .0 $519.8 $0.0 $411.8 2035 $0.0 $545.7 $0.0 $429.5 2036 $113 .9 $0 .0 $559.4 2037 $673.3 $673.3 $ 11 3.9 2038 $673.3 $673.3 $87.4 2039 $113.9 $5 16.9 $516.9 2040 $673.3 $673.3 2041 Total $673.3 $673.3 $673.3 $516.9 $516.9 $516.9

• All Dollars in Millions

ENCLOSURE 2 Fifth Amendment to the Tennessee Valley Authority Master Decommissioning Trust Agreement

FIFTH AMENDMENT TO THE TENNESSEE VALLEY AUTHORITY MASTER DECOMMISSIONING TRUST AGREEMENT This Fifth Amendment to the Tennessee Valley Authority Master Decommissioning Trust Agreement is made as of the 22nd day of January, 2015, between the TENNESSEE VALLEY AUTHORlTY, a corporate agency and instrumentality of the United States, created and existing pursuant to the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§ 831-83lee (2012) ("TVA") and THE BANK OF NEW YORK MELLON (the "Trustee").

RECITALS WHEREAS, TVA and Mellon Bank, N.A., entered into the Tennessee Valley Authority Master Decommissioning Trust Agreement as of August 18, 2000 (as amended as of July 19,2002, December 17,2003, May 25,2006, and May 24,2011, the "Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Agreement); and WHEREAS, TVA and the Trustee wish to amend the Agreement pursuant to section I 0.05 of the Agreement to clarify the circumstances under which the Trustee may be responsible for investing Funds and to make other clarifying changes.

NOW, THEREFORE, in consideration of the mutual promise herein contained, TV A and the Trustee hereby agree to amend the Agreement as follows;

1. Section 7. 01 is revised by deleting the first sentence thereof in its entirety, by deleting "However," from the second sentence thereof, and by deleting the

following language from the fifth sentence thereof: "the Trustee shall be released and relieved of all investment duties, responsibilities, and liabilities specified in Article IX and those customarily or statutorily incident to a trustee with respect to the Investment Account, and as to such Investment Account,".

2. Section 7.02 is revised by replacing the first sentence thereof with the following: "An Investment Manager designated by TVA to manage an Investment Account shall have authority to manage and to direct the acquisition and disposition of the assets of the Master Trust or any Fund, or any designated portion thereof, and the Trustee shall not be under any obligation to invest or otherwise manage any assets in the Investment Account except as set forth in Article IX hereof."

3. The first paragraph of Article IX is amended and restated in its entirety to read as follows: "The Trustee recognizes the authority of an Investment Manager to manage , invest, and reinvest the assets in an Investment Account pursuant to an Investment Manager Agreement and as provided in Article Vll of this Agreement, and the Trustee agrees to cooperate with any Investment Manager as deemed necessary to accomplish these tasks. Notwithstanding the foregoing, to the extent that the assets of the Master Trust have not been allocated to an Investment Account under the investment control of an Investment Manager, and to the extent the assets of the Master Tmst have been allocated to an Investment Account but have not been invested by an lnvestment Manager, upon the written instructions of TV A and with the written consent of the Trustee, the Trustee shall have the following investment powers all of which are fiduciary powers to be executed in a fiduciary capacity and in the best interests of this Trust and the purposes hereof, namely:"

Each party represents and warrants to the other party that it has full authority to enter into thi s Amendment upon the terms and conditions hereof and that the individual 2

executing this Amendment on its behalf has the requisite authority to bind such party to this Amendment As so amended and clarified hereby, the Trust Agreement is hereby confirmed .

IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the 22nd day of January, 2015.

TENNESSEE VALLEY AUTHORITY By: ¥/.(jl.~)

Name: R becca L. J Title : Director, Treasury Management Date: January 22, 2015 3